Delve into the intricate legal analysis of jurisdiction and exemption as per the ESI Act in a recent case. The case discussed the powers and matters to be decided by the Employees’ Insurance Court, the exemption criteria for factories under the Act, and the specific provisions related to government-owned establishments. The court’s detailed exploration of statutory provisions and its impact on the case’s outcome sheds light on the importance of legal clarity in such matters.
Facts
- The Insurance Court granted a stay upon payment of Rs.3 lakhs by respondent No. 1.
- The Insurance Court rejected the application under Section 75 of the Act filed by the first respondent.
- The High Court allowed the appeal of the first respondent and set aside the impugned order passed by the Insurance Court.
- Evidence was taken and various orders demanding sums from the first respondent were issued.
- A speaking order was passed under Section 45A of the Act on 04.10.2001.
- On 05.02.2002, the first respondent filed an application under Section 75(1)(g) of the Act before the Employees Insurance Court seeking declarations and reliefs as mentioned.
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Arguments
- The E.S.I. Court did not have jurisdiction to decide the matter as the Insurance Court does not have the authority to consider the question of exemption.
- The power of exemption is only conferred upon the Government for factories owned or controlled by the local authority.
- The power of exemption is located in Chapter VIII of the Act beginning with section 87.
- The Act of 1989 omitted the words ‘the Government or’ in relation to the power of exemption under Section 90.
- The factory run by the first respondent cannot be said to be owned or controlled by the Government based on the provisions of Section 90.
- The High Court overlooked relevant statutory provisions in the Act, specifically Section 1(4), which applies to all factories including those belonging to the Government.
- Contributions are payable in terms of the Act for employees of the factory in question.
- Shri C. Nageswara Rao supports the High Court’s order
- Attempts to bring it under the proviso to Section 1(4)
- Argues that employees received better benefits than under the Act
- Contends that the High Court erred in relying on a decision that was only an order with no legal discussion
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Analysis
- Section 87 of the Employees’ State Insurance Act, 1948 defines a factory as premises where ten or more persons are employed and a manufacturing process is carried out.
- The appropriate Government has the power to exempt factories or establishments from the Act for up to one year, with the condition that employees receive benefits similar to those provided by the Act.
- Section 89 allows for the exemption of persons or classes of persons from the Act by the Government with specified conditions.
- Claims related to contribution recovery, benefits, and disputes between employers, the Corporation, and employees are to be decided by the Employees’ Insurance Court as per Section 90.
- The Act, enacted in 1948, aims to provide benefits to employees in cases of sickness, maternity, and employment injury.
- The powers and matters to be decided by the Employees’ Insurance Court are outlined in Section 75 of the Act.
- The order of this Court lacks precedential value and does not discuss legal issues.
- ESI Court has full jurisdiction to decide matters between employer and Corporation under the Act.
- Reliefs sought by the first respondent were rightly refused by the Insurance Court.
- High Court cannot confer jurisdiction upon the ESI Court to determine the issue of exemption.
- Scheme of the Act sets out matters to be decided by the ESI Court.
- Exemption of factory or establishment belonging to a local authority is subject to appropriate Government’s power under Section 87 of the Act.
- The ESI Corporation did not object and subjected itself to the ESI Court’s jurisdiction.
- Employees’ Insurance Court is specifically constituted for deciding controversies under Section 75 of the Act.
- The Act applies to all factories, including those not owned by the Government, except seasonal factories.
- Specific provision for grant or refusal of exemption exists under the Act and must be followed.
- The Act carves out an exception for factories belonging to the Government under certain conditions.
- The proviso to Section 1(4) was inserted to exempt factories under specific circumstances.
- High Court cannot treat the judgement as a precedent without considering the statutory provisions.
- The factory in question is not owned by the Government, so the proviso to Section 1(4) does not apply.
- The factory or establishment under the control of the Government alone falls within the proviso of the Act.
- Employees must receive substantially similar or superior benefits than those provided under the Act.
- The Court’s jurisdiction under Section 75 is discussed in relation to seeking exemption from the Act.
- Employees of the Municipal Corporation may be covered under the Act, depending on governing rules and benefits provided.
- The power of exemption lies with the appropriate Government, requiring consultation with E.S.I. Corporation and following prescribed procedures.
- The Insurance Court cannot exercise the power of exemption under Section 75 of the Act.
- The High Court’s decision is based partly on the judgment in Municipal Committee, Abohar.
- It is noted that the decision under consideration is an order.
- The appellant has the right to seek the benefit of exemption under Section 90 of the Act despite setting aside the impugned judgment.
- The appeal is allowed and the impugned judgment is set aside as it was unsustainable.
- In any proceeding under Section 90, the Government must consider the Corporation’s version through consultation.
- The first respondent is obligated to make contributions for employees, but exemption can be granted under Section 90.
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Case Title: E.S.I CORPORATION Vs. KAKINANDA MUNICIPALITY AND ORS. COMMISSIONER (2021 INSC 561)
Case Number: C.A. No.-001870-001870 / 2011
